Sensex 194 points up on rates cut hope (Lead)

Mumbai, June 12 (IANS) A benchmark index of Indian equities markets Tuesday gained as much as 194.79 points amid hopes of a rates cut by the Reserve Bank of India (RBI) on weak industrial output data in April.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 16,570.51 points closed at 16,862.80 points, up 1.17 percent or 194.79 points from its previous close of 16,668.01 points.

The Sensex touched a high of 16,897.42 points and a low of 16,553.47 in intra-day trade. The BSE midcap index rose 36.89 points while the smallcap index rose 17.74 points.

India’s industrial output grew by a meagre 0.1 percent in April as the slump in manufacturing and mining sectors continued, government data showed Tuesday.

The meagre growth comes against the backdrop of a fall of 3.5 percent in industrial production in March, the first such contraction in factory output since October 2011, when it shrank by 4.7 percent.

The RBI is scheduled to announce first mid-quarter review of the monetary policy June 18. In the previous review meet April 17, the central bank had cut repo rate by 50 basis points to 8 percent and said there would be less room for more cuts going forward. However, this time it is widely believed that the RBI would take some action to revive slowing economic growth.

Deputy Governor Subir Gokarn has said the decline in crude oil prices in the international markets and moderating core inflation coupled with slowdown in economic growth would give some room for easing monetary policy.

Major Sensex gainers were Maruti Suzuki, up 3.48 percent at Rs.1,147.90; Tata Motors, up 3.14 percent at Rs.242.95; Larsen and Toubro, up 2.53 percent at Rs.1,315.50; Sterlite Inds, up 2.51 percent at Rs.104; and Hindalco Inds, up 1.16 percent at Rs.122.95.

The only five Sensex losers were Dr Reddy’s Lab, down 1.81 percent at Rs.1,581.70; Wipro, down 1.71 percent at Rs.393.50; Hindustan Unilever, down 0.57 percent at Rs.432.60; Sun Pharma, down 0.20 percent at Rs.578.45; and Tata Power, down 0.10 percent at Rs.96.10.